NSE excludes Zee Entertainment from F&O segment post insolvency

The Mumbai bench of the National Company Law Tribunal (NCLT) on Wednesday admitted an insolvency petition media company Zee Entertainment Enterprises Ltd (ZEE) filed by its financial creditor IndusInd Bank, under Section 7 of the Insolvency and Bankruptcy Code (IBC). 

“However, the existing unexpired contracts of expiry months March 2023 and April 2023 would continue to be available for trading till their respective expiry and new strikes would also be introduced in the existing contract months,” according to the NSE circular.

No contracts shall be available for trading from April 28, 2023, it added.

The  shares of Zee Entertainment extended decline for the second straight day on the BSE in Friday’s early deals after insolvency proceedings were initiated against the company due to a loan default. The stock fell as much as 5% in early trade after closing down nearly 4% in the previous session. At 11:15, the stock was 1.26% down a ₹196.25 on BSE.

IndusInd Bank in its plea has claimed a default of ₹83.08 crore against the company. ZEEL is a party to the Debt Service Reserve Account (DSRA) Guarantee Agreement entered into with IndusInd Bank for the term-loan facility advanced to another Essel Group firm, Siti Networks Ltd.

Under the terms of the DSRA agreement between the bank and Siti Networks – to which Zee is also a party – the Essel group firm had guaranteed the bank’s ₹150 crore loan to the latter. Despite assurances, Zee had failed to maintain an amount equal to one quarter’s interest and one quarter’s principal at all times in the account – for the purpose of servicing its debts.

Punit Goenka, Chief Executive Officer of Zee Entertainment Enterprises Ltd, on Thursday filed an appeal in the National Company Law Appellate Tribunal (NCLAT), seeking relief against the order passed by the Mumbai bench of National Company Law Tribunal (NCLT).

This would possibly delaying a merger with the local unit of Japan’s Sony Group Corp.